Austria, Slim continue talks on Telekom syndicate

Reuters Staff

2 Min Read

VIENNA (Reuters) - Austria and America Movil (AMXL.MX) are still in talks on pooling their stakes in Telekom Austria (TELA.VI) but have not moved to formal negotiations, the state holding company said.

A man talks on his mobile phone outside a Telekom Austria phone booth in Vienna January 9, 2014. REUTERS/Heinz-Peter Bader

“There are still only talks. We are not at the negotiations stage. That could change in the next weeks, but we don’t know that yet,” the OIAG spokesman said after a special meeting of its supervisory board on Tuesday.

Austria and Mexican tycoon Carlos Slim’s America Movil are considering pooling their Telekom Austria stakes in a syndicate, which would trigger an immediate takeover offer for the rest of the company by crossing a 30 percent ownership threshold.

Creating such a syndicate would mean that Slim and Austria would have to vote in unison on major issues, protecting Austria’s influence even with a smaller stake, while allowing Slim to gain control without risking political hostility.

The special meeting had been called by the Telekom works council, which is nervous about the prospect of America Movil increasing its 27 percent stake above the OIAG’s 28 percent.

The works council is urging Austria to keep at least a blocking minority of 25 percent plus one share in the former state monopoly, which it views as its best chance of protecting jobs and the status of the company’s Vienna headquarters.

A capital increase is widely expected to be proposed at Telekom Austria’s annual shareholder meeting in May, giving Slim an opportunity to raise his stake.

Telekom Austria’s works council head Walter Hotz declined to comment after the meeting, citing the confidentiality of the contents of meetings of the OIAG supervisory board, of which he is a member.